Tag: Goldman Sachs

Europe is stunned, and bankers aghast, that the new party of the Left, Syriza, won Sunday’s parliamentary elections in Greece.

Syriza won on the promise that it will cure Greece of leprosy.

Oddly, Syriza also promises that it will remain in the leper colony.Â That is, Syriza wants to rid Greece of the cruelty of austerity imposed by the European Central Bank but insists on staying in the euro zone.

The problem is, austerity run wild is merely a symptom of an illness. Â The underlying disease is the euro itself.

For the last five years, Greeks have been told that, if you cure your diseaseâ€”that is, if you dump the euroâ€”the sky will fall.Â I guess Greeks havenâ€™t noticed, the sky has fallen already.Â With unemployment at 25%, with doctors and teachers eating out of garbage cans, there is no further to fall.

In 2010, when unemployment was a terrible 10%, a year into the crisis, the â€œTroikaâ€ (the European Central Bank, European Commission and the International Monetary Fund) told the GreeksÂ that brutal austerity measures would restore their economy by 2012.

Ask yourself, Was the Troika right?

There is a saying in America:Â Fool me once, shame on you.Â Fool me twice, shame on me.

Can Greece survive without the euro?Â Greece is already dead, but the Germans wonâ€™t even bother to bury …more

Joseph Stiglitz couldn’t believe his ears.Â Here they were in the White House, with President Bill Clinton asking the chiefs of the US Treasury for guidance on the life and death of America’s economy, when the Deputy Secretary of the Treasury Larry Summers turns to his boss, Secretary Robert Rubin, and says, “What would Goldman think of that?”

Huh?

Then, at another meeting, Summers said it again:Â What would Goldman think?A shocked Stiglitz, then Chairman of the President’s Council of Economic Advisors, told me he’d turned to Summers, and asked if Summers thought it appropriate to decide US economic policy based on “what Goldman thought.”Â As opposed to say, the facts, or say, the needs of the American public, you know, all that stuff that we heard in Cabinet meetings on The West Wing.

Summers looked at Stiglitz like Stiglitz was some kind of naive fool who’d read too many civics books.

When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn’t believe it.

The Memo confirmed every conspiracy freak’s fantasy:Â that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet.Â When you see 26.3% unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.

The Treasury official playing the bankers’ secret End Game was Larry Summers.Â Today, Summers is Barack Obama’s leading choice for Chairman of the US Federal Reserve, the world’s central bank.Â If the confidential memo is authentic, then Summers shouldn’t …more

It wasn’t too difficult picking out the Fat Bastard in the crowd of Russian models, craven moochers and media mavens. Besides, Fat Bastard and I were both desperate for coffee and heading for the same empty urn.

(We’d both signed on for Kazakhstan’s annual Eurasia Media Forum, a kind of Burning Man festival for Eastern oilgarchs and their media camp followers.)

Now, it is my policy never to mention an interlocutor’s weight, nor question the legitimacy of their birth, given my own vulnerabilities. (A would-be groupie told me, “You could do a few sit-ups, you know.” Yes, I know.)

But this particular Fat Bastard is asking for it. I had tried to put the belly of this beast out of my thoughts, but I still had a New York Times story folded in my pocket that begins:

ATHENS â€“ As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.

You made fun of me when I suggested that President Barack Obama would nominate a confessed bank scammer, a loan-sharking mortgage predator, to his cabinet.Â But thar she blows!

Today, Obama has named Penny Pritzker Secretary of Commerce. As the President says, It’s a milestone:Â the first female fraudster to hold that post. No longer will criminal bankers have to lobby the administration – because now they’ll have one of their own in the Cabinet.

The following is taken from the Chapter, “Penny’s from Heaven?” you’ll find in my bestseller, Billionaires & Ballot Bandits.Â [Get a copy, I’ll sign it, and you send it to the President.]

We never heard of this guy Barack Obama until 2004. Less than three years before taking the presidency, he was in the Illinois state senate, a swamp of scammers, backhanders, and party machine tools – not a stellar launch pad for the White House. And then, one day, state Sen. Barack Obama was visited by his fairy godmother. Her name is Penny Pritzker.

Pritzker’s net worth is listed in Forbes as $1.8 billion, which is one hell of a heavy magic wand in the world of politics. Her wand would have been heavier, and her net worth higher, except that in 2001, the federal government fined her and her family $460 million for the predatory, deceitful, racist tactics and practices of Superior, the bank-and-loan-shark operation she ran on the South Side of Chicago.

Superior was the first of the deregulated go-go banks to go bust – at the time, the costliest failure ever. US taxpayers lost nearly half a billion dollars. Superior’s depositors lost millions and poor folk in Sen. Obama’s South Side district lost their homes.

Penny did not like paying $460 million. No, not one bit. What she needed …more

“The first thing that the military police say is, ‘Give us your film.’ They had real weapons and I had a fake press pass, so it was an easy choice. Â They let me keep my pen — but they didn’t know it was one of those Austin Powers jobs with the video camera hidden inside.”

In an extraordinary talk mixed with live, undercover footage from his investigations from around the globe, Palast rips the sheets off the One Percent, exposing the Koch Brothers, Chevron, BP, Goldman Sachs, the IMF, WTOâ€”the bribers and billionaires in stories that grip you, scare youâ€”and make you laugh.

Top funders made billions from US Treasury

For NationOfChange [Thursday February 23] Republican Presidential candidate Mitt Romney called the federal governmentâ€™s 2009 bail-out of the auto industry, â€œnothing more than crony capitalism, Obama style… a reward for his big donors to his campaign.” In fact, the biggest rewards Â­Â­â€“ a windfall of more than two billion dollars care of US taxpayers Â­Â­Â­â€“â€“ went to Romney’s two top contributors.

John Paulson of Paulson & Co and Paul Singer of Elliott International, known on Wall Street as â€œvultureâ€ investors, have each written checks for one million dollars to Restore Our Future, the Super PAC supporting Romneyâ€™s candidacy.

Gov. Romney last week asserted that the Obama Administrationâ€™s support for General Motors was a, â€œpayoff for the auto workers union.â€ However, union workers in GMâ€™s former auto parts division, Delphi, the unit taken over by Romneyâ€™s funders, did not fare so well. The speculators eliminated every single union job from the parts factories once manned by 25,200 UAW members.

The two hedge fund operators turned a breathtaking three-thousand percent profit on a relatively negligible investment by using hardball tactics against the US Treasury and their own employees.

Under the control of the speculators, Delphi, which had 45 plants in the US and Canada, is now reduced to just four factories with only 1,500 hourly workers, none of them UAW members, despite the union agreeing to cut contract wages by two thirds.

It wasnâ€™t supposed to be quite so bad. The Obama Administration and GM had arranged for a private equity investor to provide half a billion dollars in new capital for Delphi, but that would have cut the pay-out to Singer and Paulson. The speculators blocked the Obama-GM plan, taking the entire government bail-out hostage. Even the Wall Street Journalâ€™s Dealmaker column was outraged, accusing Paul Singer of treating the auto company, â€œlike a third world country.â€

But it worked. Singer and Paulson got what they demanded. Using US Treasury funds:

GM agreed to pay off $1.1 billion of Delphiâ€™s debts,

forgave $2.15 billion owed GM by Delphi (which had been spun off as an independent company)

pumped $1.75 billion into Delphi operations, and

took over four money-losing plants that the speculators didnâ€™t want.

If those plants had been closed, GM factories would have shut down cold for lack of parts.

Then there was the big one: The US government agreed to take over $6.2 billion in pension benefits due Delphi workers under US labor law.

Governor Romney, while opposing the bail-out of GM, accused Obama of eliminating the pensions of 21,000 non-union employees at Delphi. In fact, it was Romneyâ€™s funders who wiped out 100% of the pensions and health care accounts of Delphi salaried retireesÂ­Â­.

Paulson and Singer paid an average of about 67 cents a share for Delphi. In November, 2011, Paulson sold a chunk of his holdings for $22 a share. Paulsonâ€™s gain totals a billion and a half dollars ($1,499,499,000), and Singer gained nearly a billion ($899,751,000) â€“â€“ thirty-two times their investment.

One-hundred percent of this gain for the Paulson and Singer hedge funds is accounted for by taxpayer bail-out support.

But, unlike the government loans and worker concessions given to GM, the US Treasury and workers get nothing in return from Delphi.

From GM, the US Treasury got warrants for common stock (similar to options) that have already produced billions in profit.

And Delphi? Itâ€™s doing well for Paulson and Singer. GM and Chrysler, still in business by the grace of the US Treasury, remain Delphiâ€™s main customers, buying parts now made almost entirely in China and other cheap-labor nations.

And exactly who are Paulson and Singer?

Billionaire John Paulson became the first man in history to earn over $3 billion in a single year â€“â€“ not for his hedge fund, but for himself, personally. At the core of this huge payday was a 2007 scheme by which, via Goldman Sachs, he sold â€œinsuranceâ€ on subprime mortgage loans. According to a lawsuit filed by the Securities Exchange Commission, Goldman defrauded European banks by pretending that Paulson was investing in the insurance. In fact, Paulson was, secretly, the beneficiary of the insurance, reaping billions when the mortgage market collapsed.

Goldman paid half a billion dollars in civil fines for the fraud. While the SEC states that Paulson knowingly participated in the scheme, he was not fined and denies he defrauded the banks.

Multi-billionaire Singer is known as Wall Streetâ€™s toughest â€œvultureâ€ speculator. Vulture fund financial attacks on the worldâ€™s poorest nations have been effectively outlawed in much of Europe and excoriated by human rights groups, conduct Britainâ€™s former Prime Minister Gordon Brown described as, â€œmorally outrageous.â€

Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for aÂ pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fatÂ welfare state, they run riot, screaming in the streets, busting windows and burning banks.

I don’t buy it.Â Â I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”

I’ll cut to the indictment: Â Greece is a crime scene. Â The people are victims of a fraud, a scam, a hustle and a flim-flam. Â Andâ€“â€“cover the children’s ears when I say thisâ€“â€“a bank named Goldman Sachs is holding theÂ smoking gun.

In 2002, Goldman Sachs secretly bought up â‚¬2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.

Goldman took a huge loss on the trade.

Is Goldman that stupid?

Goldman is stupidâ€”like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction. Â Why?

Goldman had cut a secret deal with the Greek government in power then.Â Â Their game:Â Â to conceal a massive budget deficit. Â Goldman’s fake loss was the Greek government’s fake gain.

Goldman would get repayment of its â€œlossâ€ from the government at loan-shark rates.

The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.

Cool. Fraudulent but cool.

But flim-flam isnâ€™t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.

When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out. Â Investors’ went berserk, demanding monster interestÂ rates to lend more money to roll over this debt.

Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt.Â Â The price of the bond-bust insurance, called aÂ credit default swap (or CDS), also shot through theÂ roof. Â Who made a big pile selling the CDS insurance? Â Goldman.

And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds?

That’s Goldman’s specialty.Â Â In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a â€œnet shortâ€ position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked upÂ another half a billion dollars on their “net short” scam.

But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed.Â Â Blamed and soaked for the cost of it.Â Â The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to â€” get ready for thisâ€“â€“$14,000 per family per year.

Euro-nation, the secret Geithner memo, and the Ecuador connection

Why did the Greek government throw its nation’s fate into Goldman’s greasy hands?Â Â What the heck was in the “RESTRICTED” document? And why did I have to take it to Geneva, to throw itÂ down in front of the Director-General of the WTO for authentication, a creepy French banker I otherwise wouldn’t bother to spit on, and then tear off to Quito to share it with the gratefulÂ President of Ecuador?

To give you all the answers would require me to write a book.Â Â I have:Â Â Vultures’ Picnicâ€“â€“in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters.

It’s really quite important to me that you read it, that you get it now.Â Â That’s a funny statement, I suppose, from an author.Â Â But if you’ve been reading my stories in The Guardian or watching my reports onÂ BBC Newsnight, you’ve gotten the facts; but I really want to let you inside the investigations, to cross the continents with me and follow down the leads so that you can get a fullÂ picture of The Beasts.Â Â The Beasts and their trophy wives, intelligence agency go-fers, political concubines and bone-breakers.Â Â And besides, it’s enormous fun when it’s not scary as sh*t.

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Here’s aÂ tasteÂ of Chapter 12 – The Generalissimo of Globalization – from the film-enhanced eBook edition. Â [And more on the 1% Greece-ing us, check out the upcoming issue of In These Times.]

Note:Â Â I will be in Chicago for In These Times on November 29, part of our 15 city tour that begins this coming Sunday, November 13, in Portland, then moves to San Francisco, LA, SanÂ Diego, Denver, Boulder, New Mexico, Albuquerque, Chicago, Madison, New York, DC, Houston, Burlington, and Atlanta. Find out more info here.

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Greg Palast is the author of Vultures’ Picnic: In Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores.

Get it now! For more information about Palast’s brand new book and his book-signing events in your city, go to www.VulturesPicnic.org

Palast is the author ofÂ Vultures’ Picnic: in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Carnivores.

What have I done?Â Â There’s one angry squid outÂ there.

Memo from Tim Geithner to Larry Summers (click to enlarge)

Last week,Â Democracy Now!Â andÂ The Guardian ran our story about Goldman Sachs yanking financialÂ support from a community credit union forÂ honoring one of its largestÂ customers.Â Â The customer:Â Â Occupy Wall Street.

Our report soÂ enraged Goldman that, within days, it doubled down on its attack on the littleÂ community bank.

Goldman hadÂ already demanded the return of its $5,000 payment to the Lower East SideÂ Peoples Federal Credit Union.Â Â Now,Â sources say, theÂ trillion-dollar Wall Street mega-bank sent the followingÂ message to the not-for-profit community bank:Â Â “You will never get a dime from any bankÂ ever again.”

Exclusive for The Guardian by Greg Palast, the author of Vultures’ Picnic: In Pursuit of Petroleum Pigs, Power Pirates, and High-Finance Carnivores. With Arun Gupta, founding editor of The Occupied Wall Street Journal.

Greg Palast reports from Occupied Wall Street for Democracy Now!

[Zuccotti Park, Wall Street, New York.]

Mega-bankÂ Goldman SachsÂ (assets $933bn), has declared war on one of the smallest banks inÂ New YorkÂ (assets $30m), the customer-owned community bankÂ that happens to also be the banker for Friends of Liberty Plaza, Inc, also known asÂ Occupy Wall Street. And you thought Goldman didn’t care.

The trouble began three weeks ago when the occupiers suddenly found their donation buckets filling with thousands of dollars, way more than needed for theirÂ pizza dinners. Suddenly, the anti-bank protesters needed a bank. Citibank and Chase certainly wouldn’t fit. So OWS opened an account at the not-for-profit LowerÂ East Side Peoples Federal Credit Union. Peoples has a unique federal charter â€“ designated to open accounts for low-income folk from all over NewYork, availableÂ to those families earning less than $38,000 per year. (Disclosure: the CEO of the Peoples bank is my dearly beloved ex. But that’s another story.)

Goldman Sachs had also joined up with the Peoples bank. Goldman partners reportedly earn a bit more than $38k per annum, yet Goldman’s association so farÂ was limited toÂ giving the credit union $5,000 toward the little bank’s 25th anniversary celebration dinner. Goldman’s largesse was acknowledged on the dinnerÂ invites â€“ along with the night’s honoree: Occupy Wall Street.

When a Goldman exec saw its gilded name next to Occupy Wall Street, …more

In today’s Supreme Court decision in Citizens United v. Federal Election Commission, the Court ruled that corporations should be treated the same as “natural persons”, i.e. humans. Well, in that case, expect the Supreme Court to next rule that Wal-Mart can run for President.

The ruling, whichÂ junks federal laws that now bar corporations from stuffing campaign coffers,Â will not, as progressives fear, cause an avalanche of corporate cash into politics. Sadly, that’s already happened: we have been snowed under by tens of millions of dollars given through corporate PACs and “bundling” of individual contributions from corporate pay-rollers.

The Court’s decision is far, far more dangerous to U.S. democracy. Think: Manchurian candidates.

The $200 billion bail-out for predator banks and Spitzer charges are intimately linked

While New York Governor Eliot Spitzer was paying an â€˜escortâ€™ $4,300 in a hotel room in Washington, just down the road, George Bushâ€™s new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But thereâ€™s a BIG difference. The Governor was using his own checkbook. Bushâ€™s man Bernanke was using ours.

This week, Bernankeâ€™s Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banksâ€™ mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankersâ€™ bordello: Eliot Spitzer.

Who are they kidding? Spitzerâ€™s lynching and the bankersâ€™ enriching are intimately tied.

How? Follow the money.

The press has swallowed Wall Streetâ€™s line that millions of US families are about to lose their homes because they bought homes they couldnâ€™t afford or took loans too big for their wallets. Ba-LON-ey. Thatâ€™s blaming the victim.

Hereâ€™s what happened. Since the Bush regime came to power, a new species of loan became the norm, the â€˜sub-primeâ€™ mortgage and its variants including loans with teeny â€œintroductoryâ€ interest rates. From out of nowhere, a company called â€˜Countrywideâ€™ became Americaâ€™s top mortgage lender, accounting for one in five home loans, a large chunk of these â€˜sub-prime.â€™

Hereâ€™s how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 monthly payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ainâ€™t worth a can of spam and the Grinnings are told to scram – because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the â€œdiscountâ€ they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. The Grinnings move into their Toyota.

Now, what kind of American is â€˜sub-prime.â€™ Guess. No peeking. Hereâ€™s a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers arenâ€™t stupid â€“ they had no choice. They were â€˜steeredâ€™ as itâ€™s …more

Just as the Bush Administration hands over the Treasury Department to Hank Paulson, investment banking colossus Chairman of Goldman Sachs, Robert Zoellick, the slithery Number 2 to Condoleeza Rice, will slide over to Goldman Sachs as Managing Director.

The New York Times is just tickled pink at this revolving door dosie-doe. I’m not.

[Well, I’m getting on the plane for Columbus. More on the Revolving Golden Door later today. Watch this space.]